Yesterday’s report that Betaworks paid $500,000 for Digg floored a lot of people.Since then, there’s been some additional reporting to add context to the number.
First, Digg’s CEO Matt Williams told Liz Gannes at All Things D, “the overall consideration is significantly larger.” He also said it was cash and stock. If News.me, which is where Digg ended up, has a nice exit, the deal will be worth more than $500,000.
Second, Alexia Tsotsis at TechCrunch points out this is the third transaction involving Digg. It sold the Digg team to the Washington Post for $12 million, a while back, according to a Tsotsis source. And it sold some patents to LinkedIn for $3.75-$4 million. Throw in the sale to Betaworks, and the final tally is over $16 million.
Considering Digg raised $45 million in funding, and had an opportunity to sell for $200 million, $16 is not the best exit possible. However, it’s much better than selling for just $500,000.